It's the first week of July. The shop is closing for summer vacation. Before signing off, I wanted to give you a recap on how things have gone during the first half of 2023.
The shop took in $17,900 through the first six months of the year.
$11,200 came from sales of refurbished bicycles.
$1,900 came from sales of components and accessories.
$1,900 came as free price payments to the shop for any services. Most of that is people who came in to do one-on-one work.
$2,900 is what students paid as free prices for scheduled classes.
The total of all costs for the first six months of 2023, which includes rent ($8700), fees and taxes ($2,368 for 2022 sales tax), insurance ($750), utilities and internet ($600) as well as anything else bought for a shop purpose added up to $24,400.
$8000 came from purchases of new components and bicycles.
$1500 came from event and advertising related purchases, of which:
$895 in money paid directly as commissions to artists.
$0 is how much the shop spent on tools!
In general, the shop tries to make a margin of 40% on component and bicycle sales. That margin helps estimate the input costs related to sales of bicycles and components. The revenue from these sales was roughly $13k. Of those sales, $8000 is profit (before tax!) and about $5000 is represented by the cost of buying, typically at wholesale, parts and bikes.
This $5000 is helpful for estimating inventory. You could say, and THIS assume a lot about how quickly the shop turns over inventory, that $3000 of the shop's $8000 in costs of purchasing parts and components is held up in the shop as inventory, ie, $8000 in costs minus $5000 represented by parts used to refurbish bicycles or as new pieces sold. The headline cost of $8000 for parts and bikes is counted as a cost but a large part of that total ($3000) is more or less sitting on the back shelves, waiting to be sold.
With inventory taken into account, in general terms, it cost the shop around $3500 to operate for the first six months of the year. That equates to around $583 per month to keep the shop open.
I'm giving this recap as I think there's some interest in the shop community to see the hard numbers associated with running a bicycle shop. Also I hope the numbers provide context for looking at what has happened in the shop over the past six months:
16 bikes refurbished or around 2.5 bicycles refurbished and sold per month.
19 classes taught to 54 students, or 9 students per month: four students in June, seven in May, nine in April, thirteen in March, three in February and eighteen in January. You read that right: 18 of you came in to learn in the first month of 2023.
105 free price sessions, mostly guided one-on-one work
8 commissions for artists.
Would be curious to hear any feedback in terms of what the outlook for the shop should be for the fall and winter?
Stepping back from the numbers, there are four areas where I think the shop saw a lot of progress and that are strengths going into the second half of the year.
The first is my own knowledge selecting frames and components to complete builds with. Many aspects of running a shop depend on this asset, from how well the shop is laid out to how classy people assume the shop is when they see our bikes for sale.
The second is screen printing. How-to knowledge has grown hugely and the printing events fit easily into the shop's teaching mission. Printing knowledge has grown in proportion to building relationships with other crafters and artists. It's also been valuable as a way to bring race-curious cyclists into the shop on race days.
The third strength is race organizing and specifically the Miles Galore game. The shop wants to be a promotor of racing. We think everyone should have an opportunity to start a bike race in their life. Game development has followed a similar trajectory to how classes in the shop grew out of the apprenticeship program, which is auspicious.
The fourth strength is how easy teaching has become. Thanks to so many students doing so many different kinds of work in the shop, it is easier and easier to teach on the fly and tailor courses around student needs or curiosities. It is also easier to fill last minute requests. At the start of June, the shop was able to comfortable host 16 high school students for a day of learning repairs.
I'm excited to see where learning, racing and bicycles take the shop through the end of the year but for now, it's time to say see you soon. Thank you for reading and for coming into the shop. Have a great summer.
Also I'm be happy to trouble shoot repair questions via text, please just don't try to lure me back into the shop :D
Your friend, Cory